Many of you probably haven’t had much of a break to sit and reflect on the past year, as harvest was drug out and likely rolled right into tax season! Sorry to add to the heap of work, but there is another task that should be on your radar as we roll into spring: Farm Program Enrollment. To participate in the 2018 Farm Program and be eligible for farm payments, you will need to be enrolled by March 15, 2020 at your local FSA office.
The 2018 Farm Bill was finally approved and looks very similar to the 2014 Farm Bill. The new bill requires a decision regarding farm programs for the 2019-2020 crop years. Like the previous program, you will be given the choice of Area Revenue Coverage (ARC) or Price Loss Coverage (PLC). However, this year you will sign up for two years (2019 and 2020) and then sign up for single-year elections in 2021-2023. The other change is that you can choose PLC or ARC by individual farms and by crop; it is not a countywide decision.
When making the decision between PLC or ARC, you will need to decide if you want to put a floor on your grain prices with PLC or protect yourself using revenue support with ARC. Back in 2014 when we last enrolled for the program, most people elected ARC because the benchmark prices used in the payment calculation were much higher than they are today, and we knew that at least for the first three years we were going to receive a payment.
ARC takes a benchmark price times 86% of the 5-year Olympic average yield for the county. PLC triggers a payment when the market year average falls below the set reference price of each crop. With today’s lower prices, the decision likely looks a little different for your operation. County yields will have a large impact on the whether or not ARC will qualify for a payment.
It’s not an easy decision and will likely require crunching some numbers or attending an informational meeting for you to decide. We encourage you to reach out to your local FSA control office and schedule a time to sit down and discuss your options. The FSA is also putting on some informational meetings this winter to help you make an informed choice. The good thing is after the 2020 season we have the ability to change our election, so you can adjust as the market does.
For more information you can also visit the following websites:
Farm Service Agency: http://www.fsa.usda.gov/programs-and-services/arcplc_program/index
University of Illinois: http://farmdoc.illinois.edu/